Private mortgage insurance (PMI) is the extra monthly charge on a conventional loan with less than 20% down. It doesn't last forever. Federal law sets two points where it goes away: you can ask to cancel it at 80% loan-to-value, and it ends automatically at 78%. You can often get there years sooner than the original schedule.
The two federal rules (Homeowners Protection Act)
- Borrower-requested cancellation at 80%. Once your principal balance is scheduled to reach, or actually reaches, 80% of the home's original value, you can ask in writing to cancel PMI. You need a good payment history (typically no payments 30+ days late in the last 12 months), and the lender may require proof that the home hasn't lost value.
- Automatic termination at 78%. PMI ends on its own when the balance is scheduled to reach 78% of the original value, as long as you are current on payments. You don't need to ask.
- Final termination at the midpoint. PMI must also end at the halfway point of the loan term (year 15 of a 30-year loan), even if you haven't reached 78%, for example on some interest-only or balloon loans.
"Original value" means the lower of the purchase price or the appraised value when you bought. Rising prices don't count under these rules, but see the appraisal route below.
How long it takes: a worked example
Say you buy a $400,000 home with 10% down: a $360,000 loan at 6.5% for 30 years, with a principal and interest payment of about $2,275.
| Milestone | Balance | Regular payments | With $200/mo extra |
|---|---|---|---|
| 80%: you can request cancellation | $320,000 | ~95 months (7.9 yrs) | ~64 months (5.3 yrs) |
| 78%: automatic termination | $312,000 | ~109 months (9.1 yrs) | ~75 months (6.3 yrs) |
At a typical 0.6% PMI rate, this loan pays about $180 a month in PMI. Paying an extra $200 a month reaches the 80% mark about 31 months sooner, which saves roughly $5,500 in PMI on top of the interest you save.
Four ways to get rid of PMI sooner
- Make extra principal payments. Every extra dollar brings the 80% date closer. Our PMI removal calculator shows the exact month for your loan.
- Cancel based on a new appraisal. If your home has gained value, many servicers (following Fannie Mae and Freddie Mac rules) will cancel PMI based on current value. This usually requires 25% equity after 2–5 years of ownership, or 20% after 5 years. You pay for the appraisal, typically $400–$700.
- Count improvements. Major renovations that add value, such as an added bedroom or a finished basement, can support a higher appraisal sooner.
- Refinance. If rates have dropped and your new loan is at or below 80% of current value, a refinance removes PMI. Compare the closing costs against the savings with the refinance calculator.
FHA loans are different
FHA mortgage insurance (MIP) doesn't follow these rules. With less than 10% down, annual MIP lasts for the life of the loan. With 10% or more down, it lasts 11 years. The usual way out is to refinance into a conventional loan once you have 20% equity.
Is paying PMI ever worth it?
Often, yes. PMI costs money every month, but waiting years to save a full 20% has costs too: rent, rising prices, and possibly higher rates. Many buyers come out ahead by buying with 5%–10% down and removing PMI within 5–8 years. Our cost of waiting calculator compares both paths.
Checklist to request cancellation
- Check your latest statement or amortization schedule for the date you reach 80% of original value.
- Make sure you have no late payments in the past 12 months and no second mortgage or HELOC that pushes combined loan-to-value above the limit.
- Send a written cancellation request to your servicer. Ask whether it requires an appraisal and whether current-value cancellation is available.
- Check your next escrow statement to confirm the PMI charge is gone.
Published September 22, 2026. Figures are estimates for education only, not financial advice; program rules and rates change, so confirm with a licensed lender. Spotted an error? Let us know.